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The first thing that we have to talk about is the biggest thing that has happened last week, Silicon Valley Bank collapsed. We'll give some some preference on this, but this is the second bank to collapse in a week, one of the biggest bank crisises in American history. Yep, and this was the biggest bank to fail since two thousand and eight. What pretty much caused it, at a very high level explanation is they didn't have enough money,
so they over leveraged themselves. You know, when when the Fed raised interest rates, they were invested in bonds and mortgage backed securities that didn't work out for them, actually lost money, and they announced that they needed two billion dollars to remain solvent. When they announced that they needed two billion dollars to remain solvent, there was a rush on the bank. Obviously, people were scared, like money, my money. They didn't have enough, so then the fdi C has
to step in, and now they're working through that. They said that everybody that has was fdi C insured will have their money, well had their money today, and then everybody else they're working on within the next week. So it was a very in this bank. A lot of people have not heard of, but it's one of the biggest banks in America eight I think it's eighteenth biggest
bank in America or something like that around that. So it was geared towards Silicon Valley, right, it was geared towards startup companies and benture capital firms, and these are the places where these guys went to borrow money and to get capital from. So it's not like a regular bank where you just go in like Chase Bank and you just put one hundred dollars and open an account. But you know, it's it's one of these things that that was disturbing and the causes you know, eyebrowns every raised.
So yes, so all right, so what's the impact on this going forward? What's the impact on the stock mar because all the bank stocks lost money as a as a result of this, so it was like a ripple effect. So what's the take on this SVB situation?
We I talked about it at the live show. But risk to reward means everything. So if I came to anyone and said, hey, I'm going to loan out money to start up companies that have between one hundred one to one hundred employees, the net margin is anywhere from three percent to fifteen percent, and I'm going to try and offset it by investing in bonds and mortgage backed securities. Instant fail like this is the worst business plan ever
and they're over capitalized. We'll talk about it later, but I think the ANGEL and VC environment has to change dramatically because they're funding all of these companies.
Think about I mean just want to add to you what you're saying for because that's a great point when we think about the time period of when these loans are taking place.
Yeah, low interest.
Rates, right, so hero right, we're talking about the lowest interest rates. And if we've watched the market, right, we've seen what interest rates being raised has done to tech companies. Right, So think about now when you have low interest rates and you're giving loans to tech companies, when of those interest rates rights, there's going to be an inverse effect.
I started losing, right.
So like the pandemic, we saw all these startups, right, we saw all these these companies IPO, we saw a bunch of SPACs. Pandemic is over in the past. Yeah, interest rates have risen. Now it's not you're starting to see these these these effects. Obviously we see it from companies, but now you see it from a bank. It's like yo, here it comes right. These are delayed reactions to some of these decisions like the Federick getting raised. It's like, oh,
it sounds great. Always a quarter point, always, three quarters of a point always. I mean it's like after a while, it's like, wait, what is the long term effect?
Chris? We don't see it in the short term.
I mean, and they're swooping under the rug. I said it, but I think it's interesting. They announced this news the weekend of the oscars. So now you see Brad Pitt hopefully you know nobody gets slapped on stage, right. They're going to recover it again on Monday about what happened. But so you're kind of swooping it under the rug to soften the blow post announcing midweek or Friday morning. Then on top of that, yelling ha announced that the
government is not going to build the bank out. Oh so the long term effects is like a lot of banks are going to go under any it sets up for JP, Morgan, Bank of America, the Big four to become even bigger.
Right, because you think in terms of like, yeah, there's money there people who are insured, but you're going about to lose all those customers.
Yes, and so if you're losing customers, they're gonna have to go somewhere and you need safety.
I mean, people was telling me earlier, like it was some memes going around about risk mitigation, Like the risk management team was like throwing water at a fire that sort of thirty third floor and he's throwing water on the first floor. It's like all of these companies that
got funded, most of them weren't even profitable. Like if you look even at the acquisition of Slack, and this won't affect the tech like Microsoft matter, it won't affect them, but like smaller companies that are getting started, it's gonna affect them dramatically. But even take Salesforce paying two billion for Slack, and then the team of Slack, the management team wasn't using Slack teave and communicate on a day to day basis. They was using what's happened telegram Like
it was just insane. And I hate to say it, but this is like the leaning of this generation.
Yeah, and it's tech driven.
I mean, the unfortunate part is that some many startups do employ people, right, and so now if the company, if the bank is dissolved, the right thing about the payroll of those people who are to make pyroll.
It's over.
Hopefully a bridge, loan or something will be given, but no, it's going to be over and we have to be very honest like when things earners.
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An illegal alien from Guatemala charged with raping a child in Massachusetts. An MS thirteen gang member from Al Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy nom the United States
Secretary of Homeland security. Under President Trump, attempted illegal border crossings are at the lowest levels ever recorded, and over one hundred thousand illegal aliens have been arrested. If you are here illegally, you you will be fine nearly one thousand dollars a day, imprisoned and deported, you will never return. But if you register using our CBP home app and leave now, you could be allowed to return legally. Do
what's right, leave now. Under President Trump, America's laws, border and families will be protected.
Sponsored by the United States Department at Home Mad Security. Everything was right, And I said it before.
They're gonna let us get money in twenty twenty for the disaster that's going to come. You have to check the financial soligncy score of your bank. That just mean is your bank have a high probability of going broke? Google it called them up acting with the scores. If they won't tell you what the score is, probably should take your money out.
Yeah. Yeah.
And then also what we talked about on stage yesterday, well stage Saturday, about this is that.
There's a few different lessons here.
So this was a bank where most institutions had their money, not retail investors, but retail investors can still learn from this, right, Whereas a lot of people historically, especially in our community, they're like, well, I don't trust investments, I don't understand investing to I'd rather just put my money in a bank because it's safe. And the crazy thing about that
philosophy is that banks invest your money. Yes, right, So this was like I said, the reason why this bank failed is that their investments didn't work out for them. But the overarching lesson here is that banks invest your money. So you putting money in a bank account saying that you don't want to invest. It's crazy because the money that you're putting in the bank account is actually using.
Your capital to invest. Right.
And this is the crazy part that we're using the active customer deposits as soon as they came in.
You're trying to offset the losses. We just fraud. We've said this plenty of times.
Just like you go to the bank and you ask for five thousand dollars, we got to call it before a tenth, You got to call it before. Most people think like, yo, the bank has they should have the money, right.
But this is the reason.
Because it's actively being put out to use as a tool and.
Unfortunately, it's gonna be a squeeze on regional banks with a smaller bank and Midwest I'm from man, those risk controls are going to get tightened. Long parameters are going to get tightened. I feel bad for like small business owners, like they're not going to be able to loan that money as easily. And according to what Dave was saying, it's a big crash coming yea, yeah, yeah pretty soon, So those regulations are going to get even tighter.
I was listening to the Fat Joe and he was talking about how he shout the fact jo Joey. He was talking about how he, you know, he banks with a regional bank. You know, if he had three million dollars and they only showing two hundred and fifty, what they're gonna do with the rest of my money?
He talked about that.
As far as this is concerned, yeah, yeah, not saying that he was an invested in she's saying he giving commentary for commentary on SBB on Instagram.
Yeah yeah, yeah, he did a live about it. I was like, I'm gonna check that out.
That's that's interesting because I'm like, yo, yo, Joey, like he knows like he stopped in.
He'stopped.
Sometimes he saw us who a political figure was who I didn't even recognize.
He's like, yo, guys, I'm teaching yat yo, at least you should know these things. I'm like, yo, bro, you know we tapped in, but he stapped in. So what I heard this commentary on, I'm like, yo, that's important because even like when we were saying like yeah, and I know people like I don't have two hundred and fifty thousands, but at some point, like you may start a business and it may gross that and if your business that amount is insured. But yeah, what happens to
the rest? Even if you had five thousand. It's not a well known bank. Have you ever logged into your account and your account was short or over?
Money is being actively switched, And I know they'll say it's a bank in air, but this is happening too much. Banks are going through a huge issue of not having enough liquidity, and with every market, every market is tied together NFT crypto stop market mutual funds. Like even people who thought they had mutual funds through SVB called and SVB owned a mutual fund, was not in your name, not had I did that to y'all. Boy, y'all would have my head right. So you have to be careful
a monitor who you're banking with. And it's the funny part, like the guy who ran that bank was involved in another bank crash. So going back to the fundamentals of like knowing the founder or who's running the company and what kind of intemporary they do or don't have, will decide what kind of actions that are taking. And I won't even mention Wells Fargo and other banks that introduce the scamming come on.
And then also it's important to understand we talked about this yesterday too. You got to diversify. You shouldn't put all your money in just to think. And this is why investing is important, because you should have emergency funds. That's important. But at a certain point you got to start diversifying. So whether it's in stocks, whether it's in real estate, whether it's in you know, private equity, putting
money into different other businesses. You got to start thinking strategically like how where can I put this money?
Now?
You just don't want to put money into something that's going to lose money because that's not beneficial. But now you have to actually start playing the game. It's like Monopoly. When you don't win Monopoly by just having the most money. You win Monopoly by having the hotels or the houses, because then when they land on your hotel, your house, then they have to pay you, right, And that's how
you actually win Monopoly. Because I've won Monopoly two times in the last two weeks, and the Monopoly Champions playing well, I beat my dad. It was my dad, my niece, and my son. And then the other time it was it was my niece, my son, and my sister.
Gotcha.
I'll give you the first one because your dad is legit, you know, disrespect the second one.
Okay, one question. I got strategy. There's all types of different rules you can do. It's all about strategy, all right.
My graduates from my school being forced back drop drop, Mike drop back drop.
Drop, an illegal alien from Guatemala charged with raping a child in Massachusetts and MS thirteen gang member from Al Salvador accused of murdering a Texas man of Venezuelan charged with filming and selling child pornography in Michigan. These are just some of the heinous migrant criminals caught because of President Donald J. Trump's leadership. I'm Christy nom the United
States Secretary of Homeland Security. Under President Trump, attempted illegal border crossings are at the lowest levels ever recorded, and over one hundred thousand illegal aliens have been arrested. If you are here illegally, your next you will be fine nearly one thousand dollars a day, imprisoned and deported, you will never return. But if you register using our CBP home app and leave now, you could be allowed to
return legally. Do what's right. Leave now. Under President Trump, America's laws, border and families will be protected.
Sponsored by the United States Department of Homeland Security.